GBP/USD at the Crossroads: Will Cable Break the 1.3437 Resistance?
By Zain Vawda, 12 March 2026, 11:50 UTC
The GBP/USD currency pair finds itself at a critical juncture amid an unpredictable market backdrop. After a strong rally early this week, the British Pound (GBP) is currently testing key resistance near the 100-day moving average at 1.3437, while broader dynamics involving the US Dollar (USD) and geopolitical tensions are shaping investor sentiment.
US Dollar Strength Holds Sway Amid Geopolitical and Inflation Concerns
The US Dollar remains supported by safe-haven demand, driven by ongoing geopolitical conflicts and mounting inflationary pressures. The US Dollar Index (DXY) recently retreated from a multi-month resistance near 99.57 but continues to hold firm above important thresholds.
Inflation concerns have intensified due to rising oil prices, which potentially threaten to push headline inflation higher in the near term. Markets now anticipate a possible 3% increase in US inflation figures next month, largely fueled by elevated gasoline costs. This inflation outlook has sharply reduced expectations for US interest rate cuts; the projected easing has dropped from 66 basis points two weeks ago to approximately 30 basis points currently.
As a result, the USD remains the dominant currency on the back of both its safe-haven appeal in times of geopolitical uncertainty and the prospect that US monetary policy will remain restrictive for a longer period than previously expected.
GBP/USD Faces Technical Tug-of-War Around 1.3437
From a technical perspective, GBP/USD is caught in a delicate balance between bulls and bears. The pair found support around the 1.3360 level this morning after a strong rebound from Monday’s lows but hit resistance just below the 100-day simple moving average (SMA) at 1.3437. The 100-SMA currently acts as immediate dynamic resistance on the 4-hour chart, with the price struggling to decisively break above this level. The 200-day SMA, positioned near 1.3554, lies well above the current price, indicating that the medium-term trend remains bearish as the 100-SMA trades below the 200-SMA.
Meanwhile, the Relative Strength Index (RSI) on the 14-period timeframe stands at 51.20, suggesting that momentum is beginning to shift in favor of the bulls, although this is far from a definitive breakout signal.
What Could Shape GBP/USD Next?
Bearish Scenario: If GBP/USD fails to surmount the 100-day SMA at 1.3437 convincingly, it could retrace to test support levels near 1.3380 and potentially slide further toward Monday’s low of 1.3333. A break below that point could open the door to a decline as far as the 1.3250 area.
Bullish Scenario: Conversely, a sustained move above 1.3450 would undermine the current bearish setup and potentially set the stage for a test of the 200-day SMA near 1.3550. This would be a notable sign of strength for the British Pound, driven partly by a retreat in the US Dollar should geopolitical tensions ease or inflation fears subside.
The Broader Market Context
The fate of GBP/USD remains intimately tied to the broader risk environment and US Dollar dynamics, both of which hinge on the duration and intensity of geopolitical conflicts—especially those impacting oil supply routes like the Strait of Hormuz.
Recent emergency measures by global leaders to counter oil supply disruptions have in some views signaled expectations of prolonged conflict rather than swift resolution. This perception has contributed to heightened volatility in oil prices and equity markets while buttressing the US Dollar’s safe-haven status.
Market participants are also becoming more skeptical of optimistic geopolitical developments touted by the Trump administration, tempering any enthusiasm for a rapid improvement in conditions.
Given these factors, upcoming US economic data—like tomorrow’s Personal Consumption Expenditures (PCE) report—may take a backseat in importance to geopolitical developments, as current data may not fully capture the evolving realities on the ground.
In Summary
- GBP/USD currently tests critical resistance at the 100-day SMA near 1.3437.
- US Dollar strength remains robust amid geopolitical risk and inflation concerns linked to surging oil prices.
- Rate cut expectations for the US have been scaled back, supporting the USD.
- Technical indicators present a mixed outlook, with bearish medium-term trends but potential bullish momentum building.
- The pair’s next moves will largely depend on US Dollar dynamics, which in turn are tied to the geopolitical risk landscape.
Traders and investors will be keenly watching whether cable can break above 1.3437 to renew its bullish charge or if USD strength will hold, pushing GBP/USD lower toward key support levels.
About the Author
Zain Vawda is a market analyst with expertise in forex, economics, and technical analysis. He brings years of experience interpreting financial markets and geopolitics. Follow him on Twitter/X at @zvawda for more insights.
This article is for informational purposes and does not constitute financial advice. Opinions expressed are those of the author and do not necessarily reflect those of OANDA Business Information & Services Inc.
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